Study Finds Women Confident in All but
Investing
A new Merrill Lynch study conducted in partnership with Age
Wave, “Women and Financial Wellness: Beyond the Bottom Line,”
celebrates the progress made by women while examining the financial
challenges women still face throughout their lives, and offers
potential solutions. The study finds that 70 percent of women
believe that men and women have a fundamentally different life
journey, reinforcing the need to better understand women’s
financial concerns and opportunities. The study is based on a
nationally representative sample of 3,707 respondents, including
2,638 women and 1,069 men.
“Women have come a long way both personally and professionally,
but when it comes to their finances, there is still a trail left to
blaze,” said Lorna Sabbia, head of Retirement and Personal Wealth
Solutions for Bank of America Merrill Lynch. “As women are at a
tipping point to achieve greater financial empowerment and
independence, it is even more essential that we support women in
helping them pursue financial security for life. This includes
encouraging women to invest more of their assets, save earlier for
retirement, and pursue financial solutions that closely align to
their personal values and life paths.”
Findings include:
Women look beyond the bottom lineWhile they definitely
care about the performance of investments, women view money as a
way to finance the lives they want. Seventy-seven percent say they
see money in terms of what it can do for themselves and their
families. Eighty-four percent say that understanding their finances
is key to greater career flexibility. When it comes to investing,
about two-thirds of women look to invest in causes that matter to
them.1
Superior longevityLongevity needs to be a factor in
everyone’s financial strategy, but more so for women, who on
average, live five years longer than men. Eighty-one percent of
centenarians are women.2 While 64 percent of women say they would
like to live to 100, few feel financially prepared, with 44 percent
of women stating they worry they will run out of money by age
80.
Confidence in all but investingThe study finds that women
are confident in most financial tasks, such as paying bills (90
percent) and budgeting (84 percent). However, when it comes to
managing investments, their confidence drops significantly; only 52
percent of women say they are confident in managing investments,
versus 68 percent of men. Millennial women were the least confident
at 46 percent. Of women who do invest, their financial confidence
soars; 77 percent of women who invest feel they will be able to
accumulate enough money to support themselves for life.
A trail left to blazeThe study also finds how important
understanding the gender wealth gap (as opposed to the wage gap)
and wealth escalators are to women’s financial wellness. Women
experience a gender wealth gap – the difference between men’s and
women’s financial resources across their lifetimes, including
earnings, investments, retirement savings and additional assets.
This wealth gap can translate to a woman at retirement age having
accumulated as much as $1,055,000 less than her male counterparts.3
Contributing factors include:
- Temporary interruption, permanent
impact: Many women experience lasting effects when they take
time away from the workforce to provide care, including for aging
parents, their own spouses, and their own children. One in three
mothers who returned to the workforce after caring for children
says she took on less demanding work, which resulted in lower pay.
Twenty-one percent say they were paid less for the same work they
did previously.
- Greater lifetime health and care
costs: The average woman is likely to have higher health costs
than the average man in retirement – paying an additional $195,000
on average4 – due to living longer and having to rely on formal
long-term care in later years.
“Women’s life journeys are not only different than men’s,
they’re different than the life journeys of our mothers and
grandmothers,” said Maddy Dychtwald, co-founder and senior vice
president of Age Wave. “We have more opportunities and choices when
it comes to family, education and careers, but we’re so busy taking
care of other people and other priorities, we often don’t take the
time to invest in ourselves and our future financial wellness. If
more women can actively take control of their financial future all
along the way, it would not only benefit them, but also their
families and our society overall.”
Doing more to promote financial wellnessBank of America’s
Global Wealth and Investment Management business serves affluent
and wealthy clients through two leading brands in wealth
management: Merrill Lynch and U.S. Trust. Advisors specialize in
goals-based wealth management, including planning for retirement,
education, legacy, and other life goals through investment, cash
and credit management.
“In a period of remarkable advances for women in society, a
remaining frontier is financial well-being,” said Andy Sieg, head
of Merrill Lynch Wealth Management. “It’s a basic component in the
quality of life. This report lays out a blueprint for helping
to achieve it – and we at Merrill Lynch relish the opportunity to
provide women everywhere with advice and support that can make a
meaningful difference at every stage of their lives.”
Through its advisors, educational offerings and other resources,
Bank of America is positioned to help clients overcome the common
challenges presented in the study by:
- Addressing women’s top financial
regret: not investing more. Forty-one percent of women say not
investing more is their biggest regret. Women cite lack of
knowledge (60 percent) and confidence (34 percent) as top
barriers.
- Focusing on disparities in wealth,
not just income. Women’s financial security is about more than
closing today’s pay gap. It’s about accumulating assets or wealth
at all income levels, and increasing women’s access to wealth
escalators (e.g., employee benefits such as paid time off and
pretax savings opportunities).
- Breaking the silence about
money. Sixty-one percent of women say they would rather discuss
details about their own death than talk about their money.
Forty-five percent of women report they don’t have a financial role
model.
To learn more about women’s financial wellness, read “Women and
Financial Wellness: Beyond the Bottom Line.”
1 U.S. Trust, Insights on Wealth and Worth, 20172 U.S. Census
Bureau, Population Estimates, 20153 Age Wave calculation based on
Bureau of Labor Statistics; TED: The Economics Daily, Medium usual
weekly earnings of women and men who are full-time wage and salary
workers, by age 2016 annual averages4 Age Wave estimate, based off
Yamamoto, D.H, Health Care Costs–From Birth to Death, Health Care
Cost Institute Report, 2013, HealthView, Retirement Healthcare
Costs Data Report, 2016-2017
Age WaveAge Wave is the nation’s foremost thought leader on
population aging and its profound business, social, financial,
healthcare, workforce, and cultural implications. Under the
leadership of Co-Founders Dr. Ken Dychtwald, CEO, and Maddy
Dychtwald, Senior Vice President, Age Wave has developed a unique
understanding of new generations of maturing consumers and workers
and their expectations, attitudes, hopes, and fears regarding their
longer lives. Since its inception in 1986, the firm has provided
breakthrough research, compelling presentations, award-winning
communications, education and training systems, and results-driven
marketing and consulting initiatives to over half the Fortune 500.
For more information, please visit www.agewave.com. (Age Wave is
not affiliated with Bank of America Corporation.)
Age Wave is not affiliated with Merrill Lynch.
Merrill Lynch Wealth ManagementMerrill Lynch Global Wealth
Management is a leading provider of comprehensive wealth management
and investment services for individuals and businesses globally.
With 14,829 financial advisors and $2.3 trillion in client balances
as of March 31, 2018, it is among the largest businesses of its
kind in the world. Merrill Lynch Global Wealth Management
specializes in goals-based wealth management, including planning
for retirement, education, legacy, and other life goals through
investment, cash and credit management. Within Merrill Lynch Global
Wealth Management, the Private Banking and Investment Group focuses
on the unique and personalized needs of wealthy individuals,
families and their businesses. These clients are served by more
than 200 highly specialized private wealth advisor teams, along
with experts in areas such as investment management, concentrated
stock management and intergenerational wealth transfer strategies.
Merrill Lynch Global Wealth Management is part of Bank of America
Corporation. For more information, please visit
https://www.ml.com/financial-goals-and-priorities.html.
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